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The following link is a Press Release from CICA and VCIA announcing their newly formed Coalition for Fairness to Captive Insurers (CFCI) prompted by the proposed regulations issued by the Internal Revenue Service that could have a negative impact on a large percentage of captive insurance companies.
You may be aware of this proposed regulation and may be uncertain as to what the proper response is for your company. While not a tax expert by any means I have participated in many discussions on this topic and would offer the following for your consideration:
ü This proposal, 1.1502-13(e), if put in force, will only affect firms that consolidate their taxes.
ü This is a serious threat to the captive industry. It is estimated that 40% of captives are in consolidated returns, and that they are the largest captives.
ü This is a revenue move by Treasury as they have only become lately aware of the size of the captive market.
ü This is a threat to tax revenues and jobs for many domiciles, including Arizona.
ü While probably not the most effective route you should write to your Representative and to the IRS at:
CC:PA:LPD:PR(REG-107592-00)
Room 5203
Internal Revenue Service
PO Box 7604
Ben Franklin Station
Washington, DC, 20044
You should also contact your captive manager and send a note to the Director of Insurance with a copy to Rod Morris. We are also happy to hear from you. The Board of the Association will be discussing our formal response and welcome your input.
Very truly yours,
Michael R. Mead, CPCU
AzCIA President
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